FACTBOX-Fed officials' comments on U.S. economy, policy

September 20, 2012|Reuters

Sept 20 (Reuters) - The U.S. Federal Reserve launched a newround of monetary stimulus this month, saying it will buy $40billion in housing-backed bonds each month until the labormarket improves substantially. The Fed has kept interest rates near zero since December2008 and now says it expects weak economic conditions willwarrant keeping them there through at least mid 2015, half ayear longer than it had earlier expected. The following are recent comments from Fed policymakers. Anasterisk next to a name denotes the person is a voting member ofthe policy-setting Federal Open Market Committee this year.

MINNEAPOLIS FED PRESIDENT NARAYANA KOCHERLAKOTA, Sept. 20 "If you look at our assessment of the situation of theeconomy - productive capacity, what's the level of structuralunemployment at the current time - we can keep rates low untilunemployment is at 5.5 percent. We should expect to be able tokeep rates that low for that long."

* ATLANTA FED PRESIDENT DENNIS LOCKHART, Sept. 20 "I simply came to the conclusion on a net basis that (it)would help the economy ... The potential risks associated withthat were not severe and were, and will be in the future,manageable."

BOSTON FED PRESIDENT ERIC ROSENGREN, Sept. 20 "The actions taken by the Federal Reserve last week providesignificant additional support to the economic recovery ... Theyshould result in stronger economic growth, and return us to fullemployment more quickly than would be the case absent thepolicies."

ST. LOUIS FED PRESIDENT JAMES BULLARD, Sept. 18 "We should take a little bit more (of a) wait-and-seeposture. I think that constellation of economic data doesn'treally dictate the decision that we made."

DALLAS FED PRESIDENT RICHARD FISHER, Sept. 19 "I felt an urge at the meeting last week to tie the chairmanto the mast, Odyssean-style, and to stuff wax in the ears of myfellow committee members, in order to resist the Siren call offurther large-scale asset purchases."

* NEW YORK FED PRESIDENT WILLIAM DUDLEY, Sept. 18 "If you're trying to get a car moving that is stuck in themud, you don't stop pushing the moment the wheels start turning- you keep pushing until the car is rolling and is clearlyfree."

CHICAGO FED PRESIDENT CHARLES EVANS, Sept. 18 "I am optimistic that we can achieve better outcomes throughmore monetary policy accommodation ... I would expect we wouldcontinue with something like an $85 billion base of purchases... that's a benchmark to start from."

DALLAS FED PRESIDENT RICHARD FISHER, Sept. 18 "I don't think this program will have much efficacy."

* RICHMOND FED PRESIDENT JEFFREY LACKER, Sept. 15 "Further monetary stimulus now is unlikely to result in adiscernible improvement in growth, but if it does, it's alsolikely to cause an unwanted increase in inflation."

* FED CHAIRMAN BEN BERNANKE, Sept. 13 "The idea is to quicken the recovery to help the economybegin to grow quickly enough to generate new jobs and reduce theunemployment rate."

FEDERAL OPEN MARKET COMMITTEE STATEMENT, Sept. 13 "If the outlook for the labor market does not improvesubstantially, the committee will continue its purchase ofagency mortgage-backed securities, undertake additional assetpurchases, and employ its other policy tools as appropriateuntil such improvement is achieved in a context of pricestability."

* FED CHAIRMAN BEN BERNANKE, Aug. 31 "As we assess the benefits and costs of alternative policyapproaches ... we must not lose sight of the daunting economicchallenges that confront our nation. The stagnation of the labormarket in particular is a grave concern not only because of theenormous suffering and waste of human talent it entails, butalso because persistently high levels of unemployment will wreakstructural damage on our economy that could last for many years. "Over the past five years, the Federal Reserve has acted tosupport economic growth and foster job creation, and it isimportant to achieve further progress, particularly in the labormarket. Taking due account of the uncertainties and limits ofits policy tools, the Federal Reserve will provide additionalpolicy accommodation as needed to promote a stronger economicrecovery and sustained improvement in labor market conditions ina context of price stability."

* SAN FRANCISCO FED PRESIDENT JOHN WILLIAMS, Aug. 31 "I would like to see something that had a measurable effecton job growth and on the unemployment rate over the next fewyears, and that would be arguing for a pretty large program,probably at least as large as QE2, or maybe even larger."

ST. LOUIS FED PRESIDENT JAMES BULLARD, Aug. 31 "I'd like to see some more data before taking any really bigaction." On the idea of lower the interest rate on excessreserves: "I'd even think about going into negative territory onthat ... We've gone round and round on that issue but now I kindof think this might be time to try that out."